There are several key terms we use in Plasma to refer to Plasma Waterfall components. It is important for you to understand what we mean by them and below you can find a glossary of the most commonly used terms and their definitions. These terms are standard components for all industries and the definitions are widely accepted.
Term | Definition |
Competitive discounts | A discretionary discount negotiated before the order is taken due to perceived market competition. |
Consignment costs | The cost of funds when a supplier provides consigned inventory to a retailer or wholesaler. |
Customer negotiated discounts | Discretionary customer level discount offered by sales (Can be order specific or long term, i.e. contract) |
Customer pick-up allowance | A credit offered by the retailer/distributor on the condition that the customer picks up their product; sharing in the cost savings gained from no shipping. |
Customer-charge: Customization | Additional charge for the customer for the incremental price of a nonstandard order. |
Customer-charge: Freight | Freight charge for the customer for transportation of goods. |
Customer-charge: Installation | Fee charged to the customer for the installation of the product. |
Early payment discounts | Discount negotiated for early payment. Early payment is relative to payment terms. |
End-customer discounts | Discount for end-customer rather than retailer/distributor. |
Foreign exchange adjustment | The value of the cumulative adjustment of international operational activity into functional currency. |
Free giveaways | Giveaways offered to customers to encourage use/testing of products or expand sales from existing customers. |
Free/ expedited shipping | 100% discount to shipping charge, absorbing incremental cost between standard and quicker delivery of products. |
Freight | The suppliers cost of transporting goods to a customer. |
Installation costs | All costs to install products, including transportation and labor costs. |
Instant rebates | Rebates given before the invoice price at the time of purchase. |
Inventory maintenance | Costs associated with periodic inventory audits and inventory control. |
Labor | Wages for employees directly involved in manufacturing a product |
Local/ Regional adjustments | Adjustments to list price for local costs, regional customer preferences, market competitiveness. |
Marketing/ market development promotions | A discount to promote sales to a specific market segment; can be a combination of multiple segment attributes such as territory, channel or product. |
Non-standard orders/ customization costs | Incremental cost associated with manufacturing and delivering a nonstandard order. |
Other COGS | Other direct variable costs required to produce a product including product development, etc. |
Other transaction costs | Other indirect costs incurred to enable a transaction |
Other/on/off - invoice promotions | A marketing incentive during a specific promotional time. |
Performance guarantees/ basic terms/ warranty | The cost to maintain, replace, or repair products for a certain amount of time. |
Production | The cost to manufacture a product |
Quick- cash payment discounts | A deduction from the invoice price if payment is made quickly or with cash versus credit. |
Raw materials | The cost of the materials used to manufacture a product |
Rebates | Refunds given to reward customer loyalty; often requires action by customer post purchase to obtain and typically a certain threshold needs to be met. |
Receivables carrying/ late payment costs | The cost of funds from the moment an invoice is sent until payment is received. Cost of funds incurred by retailer or distributor when customer payment is made after the agreed upon due date. |
Rush orders | Higher cost associated with filling and transporting orders more quickly than standard. |
Sales channel discount | Discounts offered to a specific sales channel that differs from that of another channel. |
Seasonal discounts | Discounts offered during a specific period of time. Discounts can be to the entire product portfolio or a subset. |
Shrinkage/ returns/ corrections | Cost of defective or damaged products sent to the customer. |
Slotting allowance | An allowance usually paid as a percentage of sales to support local advertising of a manufacturer's brand. |
Stocking allowance | A discount paid to retailers or wholesalers to make large purchases into inventory, often just before a seasonal increase in demand. |
Support and service costs | Costs incurred by retailer or distributor to execute the transaction with the customer. |
Trade spend | Allows the retailer to discount from (MSRP) manufacturer's suggested retail price. |
Volume discounts | A discount offered to a customer to reward the buying in bulk behavior. |